tv Nightly Business Report PBS November 13, 2013 6:30pm-7:00pm EST
this is "nightly business report" with tyler mathisen and susie gharib brought to you in part by. >> thestreet.com. up to the minute stock market news and in depth analysis. our quant ratings service provides objective independent ratings daily on over 4300 stocks. learn more at the street.com/nbr. numbers game, the department of health and human services tells how many people bought policies on the troubled federal health insurance exchange. critical mass or critical list for the new health care law. ch change, comments about
the upcoming holiday season. is the consumer stronger than first thought? >>. heading to the hill, janet yellen has her confirmation hearing tomorrow. will she become the first female chair and how will her policy differ from ben bernankes. that and more tonight. good evening everyone. the first score card on obama care is out and it's not good. just 106000 americans enrolled and went through their state, not healthcare.gov. the results are worst than expected and bertha coombs joins us with a break down of the numbers. bertha, i know you've been going through the information. who did succeed in signing up? >> we don't really know. they didn't really give us
demographic information. they just basically gave us the numbers of what they saw. in terms of people that actually selected a plan at this point, we're talking about 106,000 and as you mentioned, the majority of those came through the state based exchanges that have been working fairly well, only 26,000, nearly 27,000 managed to select a plan. some of them paid, a lot of them haven't but haven't select add plan through the federal exchange healthcare.gov. as we know, they had a lot of troubles for a lot of people. it's been frustrating. what is interesting is to see the wide variety, more people were able to select a plan on the california exchange than were on the federal exchange and this is just for the first month, some of the states had more updated numbers. in new york, pretty strong numbers, as well, just over 16,000, kentucky which has been fairly good for them, over 5500. but take a look at the states on
the federal exchange. these are some of the states that have big uninsur susure populations like florida 3500 people and in texas fewer than 3,000 people and texas is a place where you have over 20% of people -- 20% uninsured in that state. so that's a state they really want to target, and these problems with the website had made it difficult for people to come through. >> a couple quick questions here, was there a number they were expecting? >> it's interesting because in september, there is a memo that was released by a house panel. marlin kabner estimated they would have roughly 500,000 people who would be at this stage. so it seems like -- >> came in -- [ overlapping speakers ] >> they have been lowering expectations clearly because of the problems with the federal exchange. >> was there a conference call today to follow up?
>> there was. kathleen sebelius was on it, and her tone was actually confident saying we know there have been problems. she did address the issue and said we'll give you more data with regard to demographics next month. right now it's difficult to get the data and difficult for it to be reliable. this is just the first month. some states have been talking about what is going on in november. >> talk about addressing the issue, that president obama will be speaking out tomorrow on this and the thing in particular that people are concerned about, can i keep my original insurance policy? is there anything the president can do to make that happen at this point? >> it will be interesting to see. obviously, there are legislators that want to a pass a bill that would allow people to keep those plans. there are those who say it's difficult for the insurers at this point because they priced when they need to offer next week -- next year rather and for them to go back and keep the plans for another year might be difficult, in some cases they are offering people the chance to renew early to maintain those
plans and in some states like california and vermont, they have asked those insurers to keep people on the plans temporarily through the end of open enrollment on march 31st. there is some leeway but not a lot. >> what a story this is turning out to be. bertha coombs, thank you very much. before the enrollment numbers came out the technology chief went to capitol hill to answer questions from congress. on a chilly day in washington, it got hot. eamon javers has more. eamon? >> reporter: it was hot. tough day for the obama administration on capitol hill. there was a lot of squabbling in the hearing room, real tensions evident between democrats and republicans on this panel but the obama administration officials were asked time and time again whether or not they can promise to hit the november 30th deadline for fixes healthcare.gov they laid out for themselves. they are unable to give a concrete answer to that that
really brought confidence to the republicans on the panel on capitol hill. take a listen to this exchange where they ducked the issue whether or not they can guarantee november 30th is a head deadline for a fix. >> are we going to hit november 30th? >> thank you for the question and thank you for your kind words at the beginning, as well. the goal that has been laid out is for the site not to be perfect by the end of november -- >> functional people can log on. >> so the vast majority of americans will be able to use the site smoothly. that's the goal we're going for and working hard to get there. >> todd, the white house chief technology officer saying that's the goal, not necessarily making a guarantee they will be able to get to that november 30th deadline, tyler. >> all right, eamon javers, thank you very much. >> you bet. on wall street, call it the janet yellen rally as the dow and s&p hit records today. investors snapped up stocks with federal reserve policies when
yellen testifies before senate lawmakers tomorrow for her c confirmation hearing. boosting stocks, macy's and the much better than expected earnings and we'll have more in a moment on may sees and what to expect from that janet yellen hearing. here are today's numbers, 15,821 is an all-time high the nasdaq rose 45 and the s&p at 14 points, it's record high. the biggest gainer was the company sustain company susie was just talking about, macy's shot up more than 9%, more than $50 a piece after beating wall street estimates earning in the last quarter but what macy's said about the upcoming holiday shopping season that had the stock jumping. courtney regan has more. >> reporter: if the rest of retail echoes the commentary in the quarterly earnings report,
it's looking like a very merry christmas. they are reporting better than expected profit but the department stores encouraging guidance for the holiday season that sent the stock price to all time highs. co terry making a key statement in the earnings release saying quote, our business improved during the quarter with particular strength in october, so we are entering the fourth quarter with confidence. while last quarter macy's blamed the rare earnings miss on consumers facing head winds and says the strategy is to thank for the strong results. a key component of macy's strategy is the offering or the seamless experience across platforms from in store to online and most retail watchers across macy's leads the competition in that area. it's also the department store's merchandise and pricing that helped property the retailer above competition. >> it's things like estee
lauder, clinique ralph lauren. >> reporter: will may see's holiday forecast be the exception or the rule? >> there appears to be momentum, life in the consumer and we'll know by the end of the day tomorrow if we can extrapolate this through other parts of retail. >> speaking of momentum, not much momentum in sales at cisco. the computer networking equipment maker posted better than expected earnings but weaker sales. cisco sales fell sharply in after hours trading. the dow earned .53 a share excludeing items and two cents better but revenue that topped $12 billion was $330 million less than expected. josh lipton joins us now from silicon valley. josh, as you look through the numbers, what's the one take away from investors from the cisco report?
>> as you pointed out, cisco is getting hit hard here in the after hours, it's dragging some rivals down with it, missed on sales, you also saw a disappointing guide. one number that did strike me through the release was the decision to boost it's buy back by a big $15 billion. remember, the company had authorized up to 82 billion in stock repurchases. when you talk to cisco bulls, the analysts will bring it up. it's a big part of the thesis, they believe they will see bigger buybacks but tonight in the after hours, traders and investors are focused on the miss in the top line and a disappointing guidance. >> we'll see what happens in trading tomorrow with cisco stock and we'll count on you to fill us in. thanks so much. josh lipton reporting. with mortgage rates creeping higher and first time buyers increasingly priced out of the market, one home builder is shifting back to a strategy it used during the housing crash.
16 day partial government shut down helped lore the nation's federal deficit for october. the treasury said the government ran a 91 billion-dollar short fall last month, 25% lower than the deficit uncle sam racked up during the same month a year ago. >> one of the sticking points that led to the partial government shutdown, a losing effort by house republicans to repeal a tax on medical devices. but chief executives have picked up the fight heading to the nation's capitol today to tell how it's hurting businesses and jobs. jane wells has more. >> end the shutdown. >> end the shutdown. >> reporter: the government shutdown may be over but one
fight in the middle of it is not. >> what are we doing by taxes medical devices. >> reporter: a group of ceos hit capitol hill to lobly for a repeal on the tax they make. a 2.3% tax on everything from mri machines to stints. ♪ ♪ >> reporter: the taxes hit a silicon valley start up, they use coles to relief pain. sales should reach $10 million this year but client cornell says most are overseas where there is no tax. >> the device taxes on revenues, not profits. >> reporter: that's the beef startups have to pay taxes on revenues before they are profitable and it won't be profit nl for years, hence the trip to washington. >> the venture communique struggled and not just the device tax, it's regulations, longer approval process. a lot of the funding is coming from europe, asia and obviously, when you have investors from the
areas, they want you to commercialize, move them to those areas of the world. >> reporter: while some jobs are being shipped overseas in part because of the tax, cornell says he's trying to relocate mio science, keeping it an american company. it's just going to cost him. >> it's getting kicked around like a political football. in reality, we should get around. it's an american issue. about invasion, creating world class companies here, inviting products, getting better patient here and exporting that to the rest of the world. >> reporter: he and others lobbying for change don't believe the tax will kill invasion, just export at least some of it or at least some of the devices allowing foreigners to benefit from american technology before americans do. for "nightly business report", janes wells, washington. sea world reports better than expected earnings and that's where we begin the market
focus. the profit up 30% in the third quarter which. ceo attributes to pricing but revenues lighter than expected. the stock ended nearly 3% higher finishing at $32.82. chag shares, priced the ipo at $12.50 a chair and that was above the expected range. the ceo said he'll use some of the money raised to expand his business. >> we want to accelerate the growth and the opportune tips. in this economy strong balance sheet is a winning formula to investo investors. so we want to put $200 million more in the balance sheet and extraordinary growth. we want to use it to buy more things that help students improve the outcome. >> the outcome for the stock today not so hot. it dropped 22.5% to $9.68. it was a different story today for extended stay america, the hotel chain that specializes
in hotel rooms. they saw shares surge in the market debut, the company's ipo price of $20 was in the mid point and the stock sprinted more than 19% to $23.87. shares of perry ellis cut for the third quarter. weak sales in the private business and retail channel were to blame for the disappointing forecast. shares plunged 23% to $15. here is an update onstar bucks news we told you about yesterday. as you recall, it was ordered to pay craft nearly $2.8 billion in damages after the coffee chain easterly termination of a grocery deal. today starbucks revised the fourth quarter results to reflect that loss. kraft almost completely wiped out the earnings for the year but that didn't seem to shake
investors. share bu starbucks shares were up. the mortgage bankers association says filings for refinancing and new home loans fell 1.8% as mortgage rates edged a fraction higher. with rates sitting at a one-month high applications for loans slipping and many would be home buyers waiting for home prices to stop rising. home builders are facing a lot of challenges. so what is the state of the nation's builders right now, and how are they changing their focus and some of their products? diana olick takes a look. >> reporter: home buyers may be coming back but for the nation's big builders, they are coming back mostly to the higher end move up market. entry level buyers are priced out. >> when they can get in and afford it. i believe that is currently under pressure. >> reporter: that's why the nation's second largest home builder is shifting attention. they acquired cintex during the recession but that's not where
the buyers are now. they are heading for the higher end pulte brand. >> i think you have to adjust in our case the overall portfolio to take advantage and perhaps the entry level is not 40 or 50% of the overall market like it used to be, maybe it settles in at 35% or 30 percent. >> reporter: they have increased competition from the single family rental market. those who can't afford large down payments or don't have the credit scores necessary are increasingly turning to rental. with new home prices soaring, some builders are shifting back to strategies they used during the crash. >> we're seeing 10% pull backs in home prices from the builders, a combination of incentives, and concessions and just sometimes an out right reduction in the home price. >> reporter: pulte says he's not ready to lower prices. the margins are still too good but he's also not ruling out
concessions, either, because he doesn't expect competition from single family rental homes to go away any time soon. in fact, he calls it a long-term play. for "nightly business report", i'm dianna olick. >> reporter: if you have money in the market, you'll want to watch what happens in washington tomorrow. janet yellen faces the senate banking committee in the confirmation hearings. she's expected to win the job but not before being peppered with questions about interest rate policy, inflation, unemployment, transparency at the fed and, oh, yeah, how soon she might pull back on the stimulus the fed is bumping into the economy. joining us to talk more about janet yellen and what she means to your money is chief economist at jp morgan. do you have any doubt that ms. yellen is going to be confirmed, and if she is, presuming she is, how might she be a different fed chief than ben bernanke?
>> so far expectations are she will get confirmed. in terms of the differences from bernan bernanke, there is going to be a fair bit of continuity with bernanke. she served along side bernanke for a number of years. many of the policies bernanke created, she helped to implement, certainly that's been the case with the communication policies. i think initially, the thing is not to expect a lot of differences but actually a fair amount of continuity. >> michael, we got an advanced copy of janet yellen's testimony she'll make in front of the banking committee and sounded very much like ben bernanke in her testimony saying it's important to continue supporting the recovery. i guess that's code for keeping the stimulus plans going for awhile yet. but what can surprise us coming out from the janet yellen fed? is there something -- everything will be like ben bernanke but what could surprise us? >> well, again, i think as far as tomorrow's testimony, we
already have the prepared remarks, and, you know, i think some people were expecting that to sound more hawkish than we come to expect janet yellen in order to put aside those charges that she may be too soft on inflation. we didn't see that in the prepared remarks and i suspect she'll sound more like herself tomorrow. in terms of what could surprise us? i think yellen probably is a little -- has a little greater emphasis on communication than perhaps bernanke. bernanke was a great inventor in asset purchases. we could see continued push toward more transparency and more communication than we have from the current fed. so i think that's probably the direction to expect policy to evolve in the coming months and years. >> michael, she will also, presuming she's confirmed, she'll also be dealing with a different voting policy making committee. how might that change as some of those income bents move off the open market committee, new
people come in? is it going to be a more difficult, more fractionous group she has to deal with? >> i think certainly early next year she's going to have a very limited small board because you have a couple people who have retired but haven't been replaced and then of the rotating regional reserve bank president, a couple of those will be more hawkish. initially until we replace some board members, she's going to be dealing with a small committee and a couple of whom will be opposed to. but presumably, she'll want very accommodated policies and that may be met with two descents early on and perhaps depending there is a vacancy in the cleveland fed if that gets replaced but hawk, he could be seeing a committee of only nine people. i think that will be, you know, a little bit of an issue for yellen. >> that's interesting. and you don't see that very often, at least not in recent
history at the fed under green span or bernanke. thanks very much. >> thank you. coming up next on the program, will the high profile launch of two new gaming systems result in a surge in sales for the game maker? more tv viewers cutting the cord. the paid tv industry lost consumers getting hurt by cheaper streaming services, we're talking about knelt flix and hulu. the traditional providers lost 1 113,000 paying customers, more than a year ago.
while fewer people are paying for cable tv, more people are snapping up the hottest new video game titles and eagerly awaiting new game consoles from microsoft. julia boorstin has the story. >> reporter: sony's play station four hits stores friday. xbox 1 a week later. both are expected to sellout this holiday season which bodes well for electronic art. >> if they build into next year, we know people buy more games after they bought a new console, so we're going to have kind of the relative age of the install base will get younger and that will drive more software sales as we get into next year, particularly next holiday. >> we ask gamers who is at the top of their holiday wish list. >> gpa 5 and nba 14. >> probably buy the new nba or call of duty, those are my two
games. >> it can get pricey, yes, but for quality games like call of duty, it's totally worth it. >> reporter: this holiday season, call of duty ghost will get the biggest boost. next year we'll see the games designed specifically for the new consoles. electronic arts and destiny are the two most hotly anticipated games designed for the new format. video game sales are already on the rebound thanks to huge new titles designed for the older generation of games. in october, video game sales are expected to post the third consecutive month of gains, up more than 30%. it comes to demand for the biggest titles like ea battle field four and grand theft auto five, which broke records with a billion dollars in sales in the first few days. both titles clearly demonstrating gamers willingness to invest in new games and digital extras.
>> people are allocating more money for online map packs or downloadable content on missions and stuff. so it's fewer games but there is -- those fewer games are generating bigger revenues. >> reporter: one potential area of frustration, games made for the current consomes won't work on the new ones. >> of course, it would be super convenient for me to play regular xbox 360 games on the new xbox but not the way microsoft works. >> i sold my games after i had my fair share with them. so i'm not really worried that much. >> reporter: for "nightly business report", i'm julia boorstin. final lip tonight, christis hosted the highest grossing art auction of all time last night breaking records including $692 million for just the night. also, became the most expensive piece of art priced at $142.4
million. no word on the seller or the buyer. one other stat that's interesting, the most expensive priest of artwork sold by a living artist -- >> balloon dog. >> 58 million. >> 58 million on your front lawn delivered sunday. >> better than the stock market. >> that's "nightly business report" for tonight. i'm susie gharib thanks for watch sglg thanks from me, as well. i'm tyler mathisen, have a great evening everybody. see you back here tomorrow night. "nightly business report" has been brought to you by. >> thestreet.com, up to the minute stock market news and in depth analysis. our quant ratings service provides objective independent ratings dately on over 4 300 stocks. learn more at the street.com/nbr.